Yale to lease space in New Haven’s Alexion building

Yale to lease space in New Haven’s Alexion building

1of4The area around the Alexion building at 100 College St., New Haven, is a popular spot for panhandlers.Photo: Peter Hvizdak / Hearst Connecticut Media file photo

2of4Steel is put into place at the construction site for the Alexion Pharmaceuticals’ global headquarters on the closed-off portion of Route 34 in New Haven on March 25, 2014.Photo: Arnold Gold / Hearst Connecticut Media file

3of4A man stays out of the wind as he crosses over Congress Avenue from Lauder Hall to the Anlyan Center at the Yale School of Medicine in New Haven on Feb. 12, 2009.Photo: Arnold Gold / Hearst Conecticut Media file

4of4The Alexion Pharmaceuticals building in New Haven in 2016.Photo: Hearst Connecticut Media file

NEW HAVEN — Yale University will be taking up space in the Alexion building on College Street, after talks of deals to expand its medical labs.

“In furtherance of the university’s academic priorities, Yale has entered into a lease at 100 College Street in New Haven, an ideal location that connects the university’s medical and central campuses,” Provost Ben Polak said in a release.

Originally, when Winstanley Enterprises, the Massachusetts-based company that is the landlord for the building, was overseeing construction of 100 College Street, Yale had committed to taking 110,000 square feet in the research lab building to provide more laboratory space for its medical school researchers.

As Alexion Pharmacuticals projected its growing space needs, the company first asked Yale whether it could occupy half of the space the university was counting on at 100 College Street, then later requested the rest of the 110,000 square feet.

The Yale Office of Cooperative Research launched 11 new faculty ventures in 2017, representing $70.9 million in aggregate funding. But once a professor’s lab findings are converted into a company, the business entity can no longer be housed in university-owned space, and lab space in the city is limited. Yale is holding off on saying whether the leased space will be for its medical school researchers.

“Announcements about how the Yale space at 100 College St. will be utilized to support the university’s academic priorities will be forthcoming as implementation of the USSC’s recommendations and other initiatives are finalized,” according to a release by the university.

In 2017, Yale officials confirmed discussions about some of the Yale spin-offs moving into available space in 100 College Street, but didn’t specify at the time what they would be because negotiations were underway, the Register reported.

Alexion will continue to lease approximately half of the 14-story, 513,000-square-foot building, including occupying all of its existing laboratory space, with about 450 employees, the release said, while Yale’s lease ensures the building remains fully occupied.

The Alexion building benefits from the assessment deferral program in which the property value is fixed at the base assessment during construction and taxes are phased in over 10 years. Phase-in started in 2018 and the tax payments are set to increase significantly — around $2 million — for the first time beginning in 2020.

Under state law, nonprofit educational institutions are exempt from paying property tax, but in Yale’s lease at 100 College Street, that portion of the property won’t be tax-exempt, City Assessor Alexander Pullen said. In order to qualify for that exemption, Yale needs to own the property and use it for educational purposes.

New Haven’s reliance of property tax to support its annual budget — 51 percent — has been a fiscal issue with 55 percent of the grand list being tax exempt.

Yale University, as of the 2017 grand list , pays approximately $5 million in taxes per year on its $117,082,000 assessed taxable property. Yale New Haven Hospital, on the other hand, pays $3.16 million. Properties are assessed at 70 percent of fair market value and all calculations assume the present tax rate of 42.98 mills.

Based on the 2017 grand list, the most recent available, the university has approximately $3,302,900,000 in assessed property not present on the city’s taxable list, Pullen said. “This would equate to approximately $141,960,000 in taxes at today’s mill rate of 42.98,” he said.

Yale hospital currently has $1,209,542,216 in assessed property not present on the city’s taxable list, which would equate to approximately $51,988,629 in taxes at today’s tax rate, he said.

Under those calculations, the city would receive approximately $194 million in revenue if it were able to tax Yale University and Yale New Haven Hospital. But they are purely hypothetical because many factors would come into play if the grand list were $4.5 billion higher , Pullen said, including a lower tax rate or not getting a voluntary payment in lieu of taxes from Yale or the state.

Yearly, the university gives New Haven $11.4 million in a voluntary payment in lieu of taxes and for fire service; the hospital sends $2.6 million.

Clare Dignan reports on Hamden and North Haven, with a focus on the influence of Quinnipiac University in the towns she covers. She's New York born and Connecticut grown, having earned her B.A. in journalism at Quinnipiac University.

You can share stories and feedback with her at 203.680.9905 or mdignan@hearstmediact.com